06.06.201404:44:41UTC+00Foreign companies becoming larger targets for Asian hedge funds

For the past three years, gains in the top index covering equities in the Asia Pacific region have paled when compared to those of the US and European markets. This has contributed to hedge fund managers’ recent behavior of looking elsewhere for profits.

Up until April starting from three years ago, the MSCI Asia Pacific Index for changes in the region’s equity markets, has had an annual climb of only 2.6%, falling behind its counterparts in other markets. In the same time period, the US’ Standard & Poor 500 and the STOXX Europe 600 gained 14% and 10%, respectively.

Because of these limited local gains, some of Asia’s largest hedge funds are starting to emphasize foreign companies in their portfolio as part of their trading strategy. Among these is Azentus Capital Management Ltd. who holds $800 million worth of assets and who last year had a 17% return, a third of which can be attributed to outside Asia.

Others highlighting  the trend include Hong Kong’s Tybourne Capital Management with their $848.8 million worth of securities from the US market and Myriad Asset Management who had $479.9 million. Popular decisions in hedge funds include buying shares from companies such as Google, Apple, and Micron Technology.

It has been a turbulent year for Asian hedge funds, however, with an estimated 49% of them posting a losing record during the year’s first four months according to the Singaporean data provider Eurekahedge Pte.

 The better performance of equities outside Asia can be partially traced to recovering economies in the US and Europe spurred by the monetary easing of their central banks. These markets can also be said to be benefiting from rising the consumer and production power in Asia.